LEGAL EASE
Topping up your agreement: A right or a privilege? I recall an experienced manager called Bill being asked at a management rights information seminar, “Don’t you worry about the body corporate not extending the term of your agreements?” That was quite an understandable question when you consider that the relatively high value of management rights in comparison to other businesses depends on a secure tenure. The response was enlightening: “That is the last thing I worry about. I know that the owners are aware of and appreciate the work I do for them and that when the time comes to add another option to my agreements, I will receive overwhelming support.” And he did, time and time again, in many complexes and over many years.
I appreciate that managers invest large amounts of money in buying these businesses but that does not give them the right to a top up
John Mahoney, Mahoney Lawyers
In my long career working in the area of management rights, I have witnessed many successful managers like Bill where the adding of options to the term of agreements (or ‘topping up’ as it is known) is almost a formality. There are many reasons for this but the two most critical are performance and communication. These managers have a thorough knowledge of their duties and
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present their complex (especially the grounds and gardens) in the best possible way. They make sure via newsletters and emails that their owners know they are doing a great job and they build strong relationships with owners and like-minded committee members whose focus is the good of the complex. Such managers do not consider a top up to be a ‘right’ or an ‘entitlement’ but rather something that they need to earn through working harder and smarter. If more managers realised this when they purchased their businesses, there would be a lot fewer problems with achieving top ups than we are seeing at the moment. I appreciate that managers invest large amounts of money in buying these businesses but that does not give them the right to a top up. I have had managers say that having paid hundreds of thousands of dollars for their business, or having the largest investment in the complex, entitles them to a top up. Unit owners might well respond that they are not the ones to whom the manager paid the money for the investment. If owners are being asked to support a top up request they are entitled to at least feel that they have benefited and will continue to benefit from the services the manager provides. At the risk of repeating what I have written and spoken about many times before, here are some tips for ensuring the most likely prospect of success when you seek your top up:
MANAGEMENT
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Start thinking about your top up when you purchase your management rights.
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Recognise that at some stage you will need owners to support a to top up of your agreements, so you need to give owners a reason to give you that support.
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Build strong relationships with your owners to show that you care about them, about their complex and about their investment.
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Do not ask, ‘how can I do less work and be paid more for it?’ but rather, ‘how can I improve this complex for my owners and build a good relationship with them?’.
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Understand your duties and perform them to meet or exceed the owners’ expectations; go the extra mile, even if something may not strictly speaking be part of your specified duties.
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Make sure owners are aware of the good work you are doing. Keep them regularly informed with newsletters or social media posts. Send photos of how good the complex looks and point out your high occupancy rates and rents.
If you follow the advice in this article you will hopefully not have too much trouble when the time for your top up comes but if you do, we have lots of material to give our clients facing opposition to a top up! ResortNews | September 2020
